Bill would penalize execs who miss small-biz contracting goal

Mar. 8, 2012 - 04:58PM
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House Small Business Committee Chairman Rep. Sam Graves, above, is one of HR 3850's sponsors. (File photo / Getty Images)

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Senior executives could lose their annual bonuses if they miss small-business contracting goals, under a bill that passed the House Small Business Committee.

HR 3850, one of six bills that passed the committee Wednesday, would increase federal small-business contracting goals from 23 percent to 25 percent.

Agencies are assigned their own small-business goals that combined are supposed to meet the federal goal.

Senior executives who fail to achieve the goal for the whole agency would be barred from taking sabbaticals the following year or from receiving any incentive awards, according to the bill.

"This bill is a bipartisan solution that will help small businesses grow and create jobs by holding federal agencies accountable," said Rep. Bill Owens, D-N.Y., who co-sponsored HR 3850 with committee Chairman Rep. Sam Graves, R-Mo. "In our fight to provide small-business owners the tools they need to hire and expand, we have to ensure that Washington lives up to its promise to foster an environment of economic growth."

Agencies spent $98 billion procuring products and services from small businesses in 2010, narrowly missing the current 23 percent goal, according to the Small Business Administration. Increasing the goal to 25 percent would translate to an additional $11 billion per year in federal contracts for small businesses, according to the committee.

Amendments to the bill would require SBA to publish small-business contract reports online and to start reporting on why firms are considered to be economically and socially disadvantaged.

Other small-business bills passed by the committee Wednesday:

• HR 3893 would require agencies to solicit public comments on their process for deciding whether to insource work done by small businesses before any insourcing decisions are made.

Small businesses should know what conditions an agency is considering when deciding to insource, said Rep. Mick Mulvaney, R-S.C., the bill's sponsor. Some contractors could adjust their services and keep the contract, he said.

Some committee members raised concerns that challenging an agency's decision could delay work and open protected deliberations to public scrutiny.

"Small business shouldn't be losing a contract under a secret process," Graves said.

• HR 3851 would make the director of each agency's Office of Small and Disadvantaged Business Utilization (OSDBU) a senior acquisition leader in the agency and prohibit the director from holding any other position.

Committee members have chided several agencies for defying the Small Business Act, which requires OSDBU directors to be in direct contact with the agency's secretary or deputy secretary. Some agencies have placed their OSDBU directors under less senior officials or named top level officials as OSDBU directors but had more junior administrators doing the day-to-day activities.

HR 3851 was amended to require directors to have two years' experience in government contracting.

• HR 3980 would require agencies to submit acquisition plans to their OSDBU and other agency small-business representatives. Procurement officials often fail to send procurement documents to these small-business representatives for review or they send them just before a contract will be opened for bids, which limits their ability to alter or improve contracts to benefit small businesses, said Rep. Jaime Herrera Beutler, R-Wash., the bill's sponsor.

• HR 4121 would create a small-business designation for "early-stage" small businesses that have 15 or fewer employees and average annual revenue of less than $1 million. The bill would give early-stage small businesses access to set-aside and sole-source contracts between $3,000 and $50,000.